All you can do with Crypto is wait
First published 27th April 2021
How can it be, you might reasonably ask, that the crypto market is worth $2trn, and yet it doesn’t really do anything? There’s lots of activity, but if the entire thing went down tomorrow would you even notice? I bet you’d be more put out by your boiler conking out one afternoon.
Strange as it seems this is just as it should be. What people forget, or don’t realise, about Crypto is just how revolutionary it is at its core. Forget the technicalities for a moment and just consider this: last month, a group of people who’d never met each other, came together over the internet and chipped in to buy a piece of digital art worth $5.4m. Not only did they buy it, they designed a binding, democratic process to decide when to sell it.
No crowdfunding platform was involved, no companies, no legal contracts, no governments. It was entirely self-organising, by a group of ‘people’ who are little more to each other than IDs on a computer screen. To most people this would seem crazy. The miraculous accomplishment of crypto is that its not in the slightest.
This kind of thing has just never happened on earth before. We have layers and layers of ‘social infrastructure’ built up over centuries that allow us to trust other people in economic interactions (think about sending your pay cheque to a bank, or making a pension payment). What these folks have done just discards all of that in a wave, supplanting it with cryptography and servers.
If it feels discombobulating that’s exactly how it should be. You’ve probably never actually asked conscious questions at this level before. How do I actually know the bank will give me my money back? Why do I believe that? We don’t think about this stuff intellectually, we just kind of feel it, based on our lived experiences.
So Crypto isn’t ‘just’ internet money, or internet gold, or digital art tokens. Underneath all that it is a new system for governing the co-ordination of economic activity between humans. It is so foundational it’s essentially an alternative (in financial matters) to the legal system itself. And right now we are in the experimental phase. Its a great laboratory of tinkering and re-imagining, poking at all the constructs that make up the fabric of our day-to-day economic lives.
Think about everything you own, all your bank accounts savings accounts, your pension, mortgage, credit agreements, paying friends or food vendors, investing in stocks and shares, buying insurance, placing a bet, buying flights for a holiday this summer. All of this, and anything else that could feasibly have a dollar sign attached to it, is in-principle in-scope.
When you understand it like that a lot of things begin to make more sense. The almost ludicrously eclectic range of projects underway: betting markets (Augur), low-power urban internet devices (Helium), internet gold (Bitcoin), file storage (Filecoin), art auction houses (SuperRare), in-game virtual goods (Enjin).
There’s the repeated cycles of boom and bust (four currently, and counting), which are a manifestation, ultimately, of extreme uncertainty about where all this will end up. There’s the way that crypto doesn’t seem to fit cleanly into any of the normal categories we have for the world. Is it part of the tech industry? Kind of, but it doesn’t look or feel anything like the rest of the tech industry. Is it a new computing paradigm? Is it an extension of the internet? Is it money? It evades definition using any familiar reference points. Its a new world-view, and it demands to be be understood on its own terms.
And then there’s the achingly slow pace of adoption. Still, thirteen long years in, and a good outcome for a crypto consumer app is a mere tens of thousands of users. To put that in perspective, a humble barometer app (such as Barometer Plus) has had over 100k downloads. All this noise, all this hype, and it makes not one jot of difference to any of our lives?
But this is just how it should be. This is how it should be when your playing with such deep foundations. It takes time. Everything has to be built up from scratch, like building a new town on Mars; you need people to join the movement and up-skill gradually, novel infrastructure to be developed, layer upon layer, cultural norms and patterns to emerge.
So the only sensible approach to crypto is to wait. To sit back with some popcorn, watch the whole wacky show unfold and see what happens. Because Rome wasn’t built in a day, and sure as hell the new economic paradigm for 21st century humanity isn’t going to be done in a decade.
